BluefoxToday blog : New Fannie Policy Could Mean Last Minute Problems

New Fannie Policy Could Mean Last Minute Problems

Fannie Mae ChangesFor the last 18 months most lenders have added additional "Quality Control" in the mortgage process between Underwriting and Funding.  Many of those same Investors require the tax transcripts pulled prior to the loan being submitted for Underwriting, and they perform additional Automated Appraisal Valuations on each file - again as a Quality Control measure... trying to get rid of Fraud.

In an Announcement earlier this month, Fannie Mae made it clear to Lenders that they need to do more to determine "Undisclosed Liabilities."  In particular, Fannie suggests the following:

  • Refreshing a credit report just prior to closing may uncover additional debt or credit inquiries.
  • New vendor services are becoming available to provide borrower credit report monitoring services between the time of loan application and closing.
  • Credit inquiries listed on the credit report should be investigated to determine whether the borrower did in fact open additional debt resulting in repayment obligations. In some cases, it is possible to obtain a direct verification with the creditor associated with the inquiry.

Credit Inquiries Could Hurt Your Next DealOkay - for the most part I think the extreme measures we are going to are warranted.  They are a pain, time consuming, and add to the overall cost of processing a loan... but I get it.

But can you imagine having to actually verify if credit was issued from every inquiry? 

So a week before closing, the borrower shops for a sofa, a refrigerator, a lawn mower... and it will show up on the final credit report pulled the day before closing... and we'll have to WAIT to see if Lowe's actually issued credit to them?  OUCH!

We ALL need to be talking to borrower's about this important, and possibly problematic change in the system! For more information on Credit Inquiries click here.

If you are looking for a mortgage in NC - please call Steve and Eleanor Thorne 919.648.5058 First Financial Services.


Comment balloon 9 commentsEleanor Thorne • May 26 2010 10:42AM


Sadly the problems at Fannie are making it so frustrating to extremely well qualified borrowers to get mortgages that the fallout very possibly can be a borrower walking away with a very bad taste in his/her mouth toward the originator of the loan. Many of us pride ourselves on referral business; I have many well satisfied borrowers.

It all backs in to the real problem behind the collapse. Greediness on wall street and failure of the SEC to do their job. Some steps taken were necessary; many like this one will likely have no effect on the end result of a borrower getting a loan. It will make the process that much more miserable.

Posted by Dora Griffin, NMLS 6380 (D A Griffin Financial.LLC) about 10 years ago

I totally agree!  I don't think this is going to do a darn thing to actually prevent any fraud!  But - mine is not to question why - just need to hammer this home to the borrowers!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) about 10 years ago

This really is getting frustrating and we have recently gotten bite by Fannie Mae

your friend in Charlottesville Virginia!

Posted by Charles McDonald, REALTOR®, Blogger, Principal Broker®, Owner (Charlottesville Real Estate Solutions) about 10 years ago

Thanks Eleanor for such great info that we can pass along to our buyers!  You are always a wealth of information for us!!!

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) about 10 years ago

Eleanor, this is great information. Earlier this spring I had a closing scheduled to close on a Friday. It got moved to Wednesday but the Buyer didn't worry about it and turned in her notice at work. She had found a better job. On monday they called her employer again and the receptionist said she "gave notice". We had to wait until she got her first paystub 3 weeks later to close. No one was happy about it.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) about 10 years ago

Oh boyyyyyy...

Eleanor, I believe that your role in the real estate power team is the hardest of them all!  I have so much respect for you and all lenders who are still in business and can close business!

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) about 10 years ago


Now if ever communication with the borrower about this is so important. It's going to stay with us for a long while I suspect.

Posted by Esko Kiuru about 10 years ago

I had this happen to one of my clients, more than 15 years ago.  Seems like the old rules are becoming the new rules. 

The new condo regs are another issue.  Don't the management companies receive notification of these changes?  Seems crazy that you cannot sell your home, because others didn't do their job.

Posted by Frances C. Rokicki, Broker-Mentor,CRS (Fran Rokicki Realty, LLC) about 10 years ago

You think they might be closing the door after the horse is gone?

Posted by J Perrin Cornell, Broker, ABR, VAMRES (Coldwell Banker Cascade Real Estate) about 10 years ago